Logan Green, the co-founder and former CEO of ride-hailing platform Lyft, will remain on the company’s board despite opposition from some shareholders, according to preliminary results from the company’s annual shareholder meeting Thursday.
The SOC Investment Group, an organization that says it holds corporations and leadership accountable for irresponsible and unethical corporate behavior, sent a letter to Lyft shareholders in May urging them to vote against Green’s position on the board. The group said Green “bears particular responsibility for failing to properly address mounting concern over rideshare driver safety.”
The group cited research that found ride-hail drivers have experienced unsafe working conditions such as verbal abuse, physical assault, robbery, carjacking and even murder. Green, as co-founder and CEO, continuously overlooked his responsibility to address these concerns and keep drivers safe, they argued.
SOC also accused Lyft of failing to provide updated information about driver safety and for reporting assaults inconsistently The group pointed to a California Public Utilities Commission report that showed 9,959 assault or harassment cases in 2021, which it says was inconsistent with Lyft’s 2021 community safety report. The latter included a lower number nationally: 4,158 sexual assaults in the U.S. from 2017 to 2019.
“Either safety problems have increased substantially, or inconsistent definitions are making comparisons difficult, indicating the importance of ongoing, annual updates to Lyft’s driver safety disclosure,” SOC Investment Group wrote.
Lyft did not respond in time to comment.
Driver safety wasn’t addressed during the short shareholder meeting Thursday. One shareholder asked about how driver deactivations are managed. Driver deactivations — when Lyft removes a driver’s access to the platform due to rider complaints — is a continual pain point for drivers, who claim to be booted without warning or reason. Drivers of Lyft and Uber say the platforms don’t provide enough transparency into reasons for deactivation, so the drivers suspect false complaints from riders.
“We don’t explicitly describe the standards that were violated when the deactivation happens, and there’s a reason for that,” said CEO David Risher. “For every reported incident, we need to balance providing as much transparency as we can for drivers, but at the same time protect the safety of the reporting party. Now, having said that, we’re working really hard to provide drivers with more clarity into the reasons why they were deactivated when we can and make it easier for drivers to track and support the whole investigation process from end to end. We’re also working on gathering more information from our riders to identify and reduce false reporting, which can occasionally happen.”
The other two proposals in Lyft’s proxy statement — regarding the appointment of an independent registered public accounting firm and the compensation of named executive officers — were approved, according to preliminary results.
ISS, a corporate governance management company, backed SOC’s letter and added its own concerns, including the “failure to change its classified board structure and for maintaining a multi-class capital structure with unequal voting rights.”
ISS points to Lyft’s governance mechanisms such as staggered director elections and dual-class voting rights as a hindrance to ensuring that directors take steps to mitigate long-term risk. Lyft’s dual-class structure empowers Green and John Zimmer, co-founder and former president, long after they leave the company. They both still hold high-voting shares that entitle them to 20 votes per share until both of them are dead. If one dies or becomes incapacitated, Lyft’s sunset clause enables the remaining co-founder to control the votes of the deceased/incapacitated co-founder. And when they’re both dead, a trustee will retain the last living co-founder’s full voting powers for a transition period of nine to 18 months.
“With improved governance mechanisms, the board could be expected to be more accountable and responsive to long-term shareholders, such as those raised by the proponent,” said ISS in a statement.
Lyft co-founder Logan Green retains board seat despite shareholder opposition by Rebecca Bellan originally published on TechCrunch
source https://techcrunch.com/2023/06/15/lyft-co-founder-logan-green-retains-board-seat-despite-shareholder-opposition/
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